Windows Live Writer is a desktop-based blog publishing software. It not only works for Live Spaces, but also Blogger, Wordpress & all other popular blogging platforms. It's by far the best one I've ever seen...
It's as if you are using Word 2007 but with added benefits like 3rd party plugins, spell-checking, tables, labels, html editing...
Live Writer also analyses your blog templates & shows you exactly how your post will appear.

However, it's still in the Beta stage & i've noticed a few bugs.. You can't align in the middle & pictures are not uploaded with Blogger.
I guess these issues would be resolved in the final version. (Blogger uses Picasa Web for storing your pictures, so that should be easily sorted out)

Download here.